Correlation Between Global Business and DubberLimited

Can any of the company-specific risk be diversified away by investing in both Global Business and DubberLimited at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Global Business and DubberLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Business Travel and Dubber Limited, you can compare the effects of market volatilities on Global Business and DubberLimited and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Global Business with a short position of DubberLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Business and DubberLimited.

Diversification Opportunities for Global Business and DubberLimited

0.11

Correlation Coefficient

Global Business  DubberLimited

Average diversification

The 3 months correlation between Global and DubberLimited is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Business Travel and Dubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dubber Limited and Global Business is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Global Business Travel are associated (or correlated) with DubberLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dubber Limited has no effect on the direction of Global Business i.e., Global Business and DubberLimited go up and down completely randomly.

Pair Corralation between Global Business and DubberLimited

Given the investment horizon of 90 days Global Business is expected to generate 29.06 times less return on investment than DubberLimited. But when comparing it to its historical volatility, Global Business Travel is 54.14 times less risky than DubberLimited. It trades about 0.18 of its potential returns per unit of risk. Dubber Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.60  in Dubber Limited on October 3, 2024 and sell it today you would lose (0.10) from holding Dubber Limited or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Global Business Travel  vs.  Dubber Limited

Global Business Travel

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Business Travel are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Global Business reported solid returns over the last few months and may actually be approaching a breakup point.

Dubber Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dubber Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DubberLimited reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Business and DubberLimited

The main advantage of trading using opposite Global Business and DubberLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Business position performs unexpectedly, DubberLimited can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DubberLimited will offset losses from the drop in DubberLimited's long position.

The idea behind Global Business Travel and Dubber Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.